FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
(Mark One)
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For Quarterly Period Ended March 31, 1996
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from _________ to______________
Commission File No. 1-9318
FRANKLIN RESOURCES, INC.
(Exact name of registrant as specified in its charter)
Delaware 13-2670991
-------- -----------
(State or other jurisdiction (IRS Employer
of incorporation or organization) Identification No.)
777 Mariners Island Blvd., San Mateo, CA 94404
(Address of Principal Executive Offices)
(Zip Code)
(415) 312-2000
(Registrant's telephone number, including area code)
___________________________________________________
(Former name, former address and former fiscal year,
if changed since last report)
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the Securities
Exchange Act of 1934 during the preceding 12 months (or for such
shorter period that the registrant was required to file such reports),
and (2) has been subject to such filing requirements for the past 90
days.
YES X NO ______
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS:
Indicate by check mark whether the registrant has filed all
documents and reports required to be filed by Sections 12, 13 or 15(d)
of the Securities Exchange Act of 1934 subsequent to the distribution
of securities under a plan confirmed by a court.
YES _____ NO ______
APPLICABLE ONLY TO CORPORATE ISSUERS:
Outstanding: 80,348,334 shares, common stock, par value
$.10 per share at April 30, 1996.
Exhibit index See Page _____
PART I -FINANCIAL INFORMATION
Item 1. Condensed Financial Statements
In the opinion of management, all appropriate adjustments necessary to
a fair presentation of the results of operations have been made for the
periods shown. All adjustments are of a normal recurring nature.
Certain prior year amounts have been reclassified to conform to current
year presentation. These financial statements should be read in
conjunction with the Company's audited financial statements for the
fiscal year ended September 30, 1995.
Franklin Resources, Inc.
Consolidated Statements of Income
Unaudited
Three months Six months
ended ended
March 31 March 31
--------- ---------
(Dollars in thousands, except
per share data) 1996 1995 1996 1995
----- ----- ----- -----
Operating revenues:
Investment management fees $215,336 $172,582 $416,971 $347,156
Underwriting commissions,
net 3,739 9,096 6,714 22,209
Transfer, trust and
related fees 22,631 15,520 44,020 31,463
Banking/finance, net and
other 2,924 2,583 3,478 7,186
-------- ---------- --------- ---------
Total operating
revenues 244,630 199,781 471,183 408,014
-------- ---------- --------- ---------
Operating expenses:
General and administrative 121,122 85,003 228,176 181,340
Selling 17,286 19,886 32,811 38,121
Goodwill amortization 4,530 4,640 9,371 9,210
-------- ---------- --------- ---------
Total operating
expenses 142,938 109,529 270,358 228,671
-------- ---------- --------- ---------
Operating income 101,692 90,252 200,825 179,343
Other income/(expense):
Investment and other
income 9,989 5,262 20,654 12,025
Interest expense (3,419) (2,880) (6,042) (6,303)
-------- ---------- --------- ---------
Other income/(expense),
net 6,570 2,382 14,612 5,722
-------- ---------- --------- ---------
Income before taxes on income 108,262 92,634 215,437 185,065
Taxes on income 33,050 29,594 66,274 58,721
-------- ---------- --------- ---------
Net income $75,212 $63,040 $149,163 $126,344
======== ========== ========= =========
Earnings per share:
Primary $0.91 $0.76 $1.79 $1.52
Fully diluted $0.91 $0.76 $1.79 $1.52
Dividends per share $0.11 $0.10 $0.22 $0.20
The accompanying note is an integral part of these financial
statements.
Franklin Resources, Inc.
Consolidated Balance Sheets
Unaudited
March 31 September 30
(Dollars in thousands) 1996 1995
------- ------------
ASSETS:
Current assets:
Cash and cash equivalents $322,953 $246,184
Receivables:
Fees from Franklin Templeton Group 121,268 110,972
Other 43,248 38,407
Investment securities, available for
sale 206,408 208,478
Prepaid expenses and other 11,325 7,167
--------- ---------
Total current assets 705,202 611,208
--------- ---------
Banking/finance group assets:
Cash and cash equivalents 14,629 15,515
Loans receivable, net 385,866 450,013
Investment securities, available for
sale 26,649 23,655
Other assets 6,176 6,876
-------- ---------
Total banking/finance group
assets 433,320 496,059
-------- ---------
Other Assets:
Investments:
Investment securities, available
for sale 18,643 15,291
Real Estate 8,890 8,826
Deferred costs 46,348 17,703
Premises and equipment, net 129,696 118,628
Goodwill, net of $65,027 and $56,375
amortization, respectively 650,982 660,363
Receivable from banking/finance group 253,426 302,273
Other assets 14,955 14,330
-------- ---------
Total other assets 1,122,940 1,137,414
---------- ----------
Total assets $2,261,462 $2,244,681
=========== ============
The accompanying note is an integral part of these financial
statements.
Franklin Resources, Inc.
Consolidated Balance Sheets
Unaudited
March 31 September 30
(Dollars in thousands) 1996 1995
------- ---------
LIABILITIES AND STOCKHOLDERS' EQUITY:
LIABILITIES:
Current liabilities:
Trade payables and accrued expenses $121,276 $117,744
Debt payable within one year 30,333 87,204
Dividends payable 8,838 8,123
--------- ---------
Total current liabilities 160,447 213,071
--------- ---------
Banking/finance group liabilities:
Deposits of account holders:
Interest bearing 139,096 159,627
Non-interest bearing 10,110 9,747
Payable to parent 253,426 302,273
Other liabilities 3,343 2,076
--------- --------
Total banking/finance group
liabilities 405,975 473,723
--------- --------
Other Liabilities:
Long-term debt 421,184 382,367
Other liabilities 15,102 14,477
--------- --------
Total other liabilities 436,286 396,844
--------- --------
Total liabilities 1,002,708 1,083,638
----------- ----------
STOCKHOLDERS' EQUITY:
Preferred stock, $1.00 par value,
1,000,000
shares authorized; no shares issued or
outstanding
Common stock, $.10 par value; 500,000,000
shares authorized; 82,264,982 shares
issued; 80,349,133 and 80,939,611
shares outstanding, respectively 8,226 8,226
Capital in excess of par value 98,261 92,190
Retained earnings 1,222,678 1,091,204
Less cost of treasury stock (86,360) (48,519)
Other 15,949 17,942
--------- ---------
Total stockholders' equity 1,258,754 1,161,043
---------- ----------
Total liabilities and
stockholders' equity $2,261,462 $2,244,681
=========== ===========
The accompanying note is an integral part of these financial
statements.
Franklin Resources, Inc.
Consolidated Statements of Cash Flows
Unaudited Six months
ended
March 31
--------
(Dollars in thousands) 1996 1995
----- -----
Net income $149,163 $126,344
Adjustments to reconcile net income to net
cash provided by operating activities:
(Increase)/decrease in receivables, prepaid
expenses and other (33,969) 10,611
Increase/(decrease) in trade payables,
accrued expenses and other 23,463 (24,436)
Depreciation and amortization 19,839 20,117
Gains on disposition of assets (5,411) (407)
---------- -----------
Net cash provided by operating activities 153,085 132,229
---------- -----------
Purchases of Franklin Templeton funds, net (2,572) (25,419)
Purchases of banking/finance investment
portfolio (36,850) (67,894)
Liquidations of banking/finance investment
portfolio 33,929 75,076
Originations of banking/finance loans
receivable (21,382) (166.199)
Collections of banking/finance loans
receivable 77,239 69,242
Purchases of other investments, net (3,495) (529)
Purchases of premises and equipment and
other (19,985) (14,906)
---------- -----------
Net cash provided by (used in) investing
activities 26,884 (130,629)
---------- -----------
Increase/(decrease) in deposits of bank
account holders (20,168) 3,805
Exercise of common stock options 1,009 -
Dividends paid on common stock (16,973) (15,453)
Purchases of treasury stock (50,682) (24,194)
Issuance of debt 65,440 44,418
Repayment of debt (82,712) (20,374)
---------- -----------
Net cash used in financing activities (104,086) (11,798)
---------- -----------
Increase (decrease) in cash and cash
equivalents 75,883 (10,198)
Cash and cash equivalents, beginning of the
period 261,699 210,376
--------- ---------
Cash and cash equivalents, end of the period $337,582 $200,178
========== ===========
Supplemental disclosure of non-cash
information:
Value of common stock issued in other
transactions $18,040 $15,857
The accompanying note is an integral part of these financial
statements.
Note to Condensed Consolidated Financial Statements
1. Debt
The Company issued $60 million in medium-term notes during March, 1996,
maturing March, 2001 with coupon rates of 6.56%. The proceeds were
used to retire $20 million in medium-term notes that had matured and
reduce outstanding short-term commercial paper.
The Company's overall effective interest rate at March 31, 1996 was
6.21% on approximately $450 million of outstanding commercial paper,
medium-term notes and subordinated debentures.
The Company has entered into interest rate swap agreements to exchange
variable-rate interest payment obligations for fixed-rate interest
payment obligations without the exchange of underlying principal
amounts. At March 31, 1996, the Company had swap agreements
outstanding with an aggregate notional amount of $125 million, maturing
August through September 1999, under which the Company paid fixed rates
of interest ranging from 6.24% to 6.45%. These financial instruments
are placed with major financial institutions. The credit worthiness of
the counterparties is subject to continuing review and full performance
is anticipated. Any potential loss from failure of the counterparties
to perform is deemed to be immaterial.
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations
GENERAL
Franklin Resources, Inc. and its majority-owned subsidiaries (the
"Company") derives substantially all of its revenue and net income from
providing investment management, administration, distribution and
related services to the Franklin Templeton funds, managed accounts and
other investment products. The Company's revenues are derived largely
from the amount and composition of assets under management. The
Company has a diversified base of assets under management and a full
range of investment management products and services to meet the needs
of a variety of individuals and institutions.
The Company's assets under management were $141.4 billion at March 31,
1996, an increase of $10.6 billion (8%) from September 30, 1995 and an
increase of $22.6 billion (19%) from March 31, 1995. These increases
were the result of both net sales and market appreciation.
The Company operates in five geographic areas of the world: the United
States, Canada, the Bahamas, Europe and Asia/Pacific. At March 31,
1996, the Company had offices in 18 countries. The Company continues
to explore opportunities globally to increase its investment research
capabilities and to support global distribution channels.
I. Material Changes in Results of Operations
Results of operations
Three months ended Six months ended
March 31 % March 31 %
(In millions) 1996 1995 Change 1996 1995 Change
------ ----- ------- ------- ------- -------
Net Income $75.2 $63.0 19% $149.2 $126.3 18%
Earnings per share
Primary $.91 $.76 20% $1.79 $1.52 18%
Fully diluted $.91 $.76 20% $1.79 $1.52 18%
Operating margin 42% 45% 43% 44%
The increases in net income were primarily due to increases in
investment management fees as a result of higher average assets under
management. Operating expenses increased at a higher rate than
operating revenues resulting in a 3% and 1% decline in the Company's
operating margins in the periods under review. Operating revenues will
continue to be dependent upon the amount and composition of assets
under management, mutual fund sales, and the number of mutual fund
investors and institutional clients. Operating expenses are expected
to increase with the Company's ongoing expansion, the increase in
competition and the Company's commitment to improve its products and
services. These endeavors will likely result in an increase in selling
expenses, employment costs and other general and administrative
expenses.
The contributions to the Company's operating profit from its non-U.S.
operations continued to increase principally as a result of increased
fee revenues from investment management services provided by its
foreign subsidiaries in Canada, the Bahamas and the Asia/Pacific
region. This trend will continue to be dependent on the amount and
composition of assets managed by the Company's non-U.S. subsidiaries.
There have been no significant changes to the Company's limited
exposure to fluctuations in global currency markets.
Assets under management*
As of March %
31
(In billions) 1996 1995 Change
-------- ------- -------
Franklin Templeton Group:
Fixed income funds:
Tax-free $41.5 $39.4 5%
U.S. government (primarily GNMA's) 15.8 16.4 (4%)
Taxable and tax-free money funds 3.0 2.8 7%
Global/international 2.8 2.7 4%
-------- ------- -------
Total fixed-income funds 63.1 61.3 3%
-------- ------- -------
Equity and income funds:
Global/international 41.3 30.0 38%
U.S. equity/income 17.9 13.3 35%
-------- ------- -------
Total equity and income funds 59.2 43.3 37%
-------- ------- -------
Total Franklin Templeton fund assets 122.3 104.6 17%
-------- ------- -------
Franklin Templeton institutional
assets 19.1 14.2 35%
-------- ------- -------
Total Franklin Templeton Group $141.4 $118.8 19%
======== ======= =======
*Certain prior year amounts have been reclassified to conform to
current year presentation.
Changes in assets under management
Three months ended Six months ended
March 31 % March 31 %
(In billions) 1996 1995 Change 1996 1995 Change
------ ------ ------ ------ ------ ------
Assets under
management - beginning $135.1 $114.6 18% $130.8 $118.2 11%
Sales & reinvestments 9.9 6.1 62% 17.3 13.6 27%
Redemptions (5.1) (4.9) 4% (10.1) (11.2) (10%)
Market appreciation
/(depreciation) 1.5 3.0 (50%) 3.4 (1.8) 289%
------ ------ ------ ------ ------ ------
Assets under
management - ending $141.4 $118.8 19% $141.4 $118.8 19%
====== ====== ====== ====== ====== ======
Average assets under
management $139.1 $116.4 20% $135.6 $116.4 16%
====== ====== ====== ====== ====== ======
Fixed income funds represent 45% of assets under management as of March
31, 1996, down from 52% a year ago. This trend generally reflects
investors' preference for equity funds and their relatively high level
of market appreciation during the periods under review.
Equity and income funds represent 42% of assets under management as of
March 31, 1996, up from 36% a year ago. Global/international equity
funds' assets under management were up 38% from levels a year ago. U.S.
equity/income funds increased 35% from levels a year ago.
Institutional assets represent 14% of assets under management as of
March 31, 1996 up from 12% a year ago. This increase resulted from both
an increase in the number of clients as well as additional investments
from existing clients. The Company is strongly committed to the
institutional account area and intends to continue the expansion of the
services it provides in this area.
Operating revenue
Three months Six months
ended ended
March 31 % March 31 %
(In millions) 1996 1995 Change 1996 1995 Change
------ ------ ------ ------ ------ ------
Investment management
fees $215.3 $172.6 25% $417.0 $347.1 20%
Underwriting
commissions, net 3.8 9.1 (58)% 6.7 22.2 (70%)
Transfer, trust and
related fees 22.6 15.5 46% 44.0 31.5 40%
Banking/finance, net
and other 2.9 2.6 12% 3.5 7.2 (51%)
------ ------ ------ ------ ------ ------
Total operating
revenues $244.6 $199.8 22% $471.2 408.0 15%
The Company's revenues from investment management fees are derived
primarily from fixed-fee arrangements based upon the level of assets
under management with open-end and closed-end investment companies and
managed accounts. There have been no significant changes in the
management fee structures for the Franklin Templeton Group in the
periods under review. Investment management fees increased primarily
due to 20% and 16% increases in average assets under management during
the periods.
Underwriting commissions, net includes sales commission and
distribution fee revenues earned primarily from fund sales, offset by
payments to selling intermediaries and amortization of deferred sales
commissions paid by the Company. During the third quarter of the
previous fiscal year, many of the U.S. Franklin and Templeton funds
introduced a new class of shares, Class II shares, which pay brokers a
sales commission and distribution fees that are only partially
recovered by the Company through distribution fee revenues. During the
three- and six-month periods under review, distribution expenses have
grown at a faster rate than distribution revenues because of the
relative growth of Class II shares and other similar products outside
the United States in the Company's sales mix.
While Class II shares have increased the Company's distribution
expenses and utilized the Company's capital resources over the short
term, the Company believes that the new class of shares will result in
an overall increase in assets under management by expanding
distribution of fund shares. Sales of Class II shares represented 12%
of the Company's long-term U.S. mutual fund sales during the first six
months of 1996.
Underwriting commissions, net, also decreased due to a decrease in
commission revenue from sales of annuity products resulting from a
change in commission rates effective September 1, 1995.
The level of underwriting commissions, net can be expected to vary with
the level of sales and the level of assets under management and the
composition of products sold.
Transfer, trust and related fees are generally fixed charges per
account which vary with the particular type of fund and the service
being rendered. Transfer, trust and related fees increased in part as
a result of a 13% increase in retail fund shareholder accounts to 5.2
million from 4.6 million a year ago. Also, effective July 1, 1995,
approximately 85 of the Company's U.S. mutual funds consisting of
approximately 2.3 million shareholder accounts implemented an average
annual fee increase of $4 per shareholder account.
Banking/finance, net and other
Three months Six months
ended ended
March 31 % March 31 %
(In millions) 1996 1995 Change 1996 1995 Change
------ ----- ----- ------ ------- ------
Revenues $12.2 $14.0 (13%) $25.1 $27.4 (8%)
Provision for loan
losses (3.0) (4.4) (32%) (8.3) (7.0) 19%
Interest expense (6.3) (7.0) (10%) (13.3) (13.2) 1%
------ ----- ----- ------ ------- ------
Total banking,
finance, net and other $2.9 $2.6 12% $3.5 $7.2 (51%)
====== ===== ===== ====== ======= ======
Compared to the corresponding three-month period in the prior year,
banking/finance, net and other revenues increased principally due to
decreases in the provision for loan losses and interest expense
attributable to the banking/finance group. Revenues decreased
principally due to a 20% decrease in loans outstanding during the
period. Provision for loan losses decreased due to a decrease from the
previous quarter in delinquencies as a percent of loans outstanding
from 6.5% to 5.7%. Interest expense during the period decreased due to
reduced borrowings by the banking/finance group from the parent as a
result of net paydowns on dealer auto loans.
Compared to the six-month period in the prior year, banking/finance,
net and other revenues declined due to a decrease in revenue as a
result of lower average loan balances and an increase in the provision
for loan losses as a result of rising delinquency and charge-off rates
compared to the same period a year ago.
Operating expenses
Three months Six months
ended ended
March 31 % March 31 %
(In millions) 1996 1995 Change 1996 1995 Change
------ ------ ----- ------ ------- ------
General and
administrative $121.1 $85.0 42% $228.2 $181.3 26%
Selling 17.3 19.9 (13%) 32.8 38.1 (14%)
Goodwill amortization 4.5 4.6 (2%) 9.4 9.2 2%
------ ------ ----- ------ ------- ------
Total operating
expenses $142.9 $109.5 31% $270.4 $228.6 18%
====== ====== ===== ====== ======= ======
Increases in operating expenses principally resulted from the general
expansion of the Company's business, particularly with respect to the
opening of foreign offices and product development.
General and administrative expenses increased during the period due to
higher employment, technology and facilities costs related to the
expansion of the Company's business. Employee count increased
approximately 8% from March 31, 1995 to over 4,700 at March 31, 1996.
Employment costs represent approximately 60% of operating expenses
during the three-and six-month periods ended March 31, 1996 and
represent approximately 75% and 80% of the increases in general and
administrative expenses during the three-and six-month periods,
respectively. Employment costs include incentive based compensation
which will continue to be dependent upon increases in operating profit
margins excluding such compensation.
Selling expenses decreased during the comparative three-and six-month
periods mainly due to periodic variations in media advertising and
marketing campaigns.
Other income/(expense)
Three months Six months
ended ended
March 31 % March 31 %
(In millions) 1996 1995 Change 1996 1995 Change
----- ----- ------ ----- ----- ------
Investment and other
income $10.0 $5.3 89% $20.6 $12.0 72%
Interest expense (3.4) (2.9) 17% (6.0) (6.3) (5%)
----- ----- ------ ----- ----- ------
Other income (expense),
net $6.6 $2.4 175% $14.6 $5.7 156%
===== ===== ====== ===== ===== ======
The increases in investment income resulted from an increase in the
average levels of interest-bearing assets invested as well as capital
gains realized.
The Company's overall effective interest rate at March 31, 1996 was
6.21% on approximately $450 million of outstanding commercial paper,
medium-term notes and subordinated debentures as compared to 6.31% on
$488 million of debt outstanding at March 31, 1995.
The Company has fixed the interest rates it pays on over 85% of its
outstanding debt through its medium-term notes program, its
subordinated debentures and the interest rate swap agreements discussed
below.
The Company entered into interest rate swap agreements to exchange
variable-rate interest payment obligations for fixed-rate interest
payment obligations without exchanging of the underlying principal
amounts. At March 31, 1996, the Company had swap agreements
outstanding with an aggregate notional amount of $125 million, maturing
August through September 1999, under which the Company paid fixed rates
of interest ranging from 6.24% to 6.45%. These financial instruments
are placed with major financial institutions. The credit worthiness of
the counterparties is subject to continuing review and full performance
is anticipated.
The increase in taxes on income is primarily attributable to the
increase in pre-tax income.
II. Material Changes in Financial Condition, Liquidity and Capital
Resources
Selected balance sheet items
As of As of
March September
31 30 %
(In millions) 1996 1995 Change
------ ------- -------
Banking/finance loans
receivable, net $385.9 $450.0 (14%)
Receivable from the
banking/finance group $253.4 $302.3 (16%)
Deferred costs $46.3 $17.7 162%
Debt payable within one year $30.3 $87.2 (65%)
Long term debt $421.2 $382.4 10%
-------- ------- ------
The Company substantially increased its auto loan portfolio during
fiscal year 1994 as it expanded this business activity. Because a
substantial portion of the portfolio was new, the impact of delinquency
and loss trends was not fully reflected in the financial performance of
the Company until fiscal year 1995. As the Company has expanded its
auto loan financing business, it has concurrently strengthened its
collection systems, policies and procedures, as well as its
underwriting criteria and its overall management team. Management is
monitoring the results of its increased efforts in the credit and
collection areas. At March 31, 1996, banking/finance loans receivable,
net decreased due to net paydowns and a decrease in funding of new auto
loans as a result of higher credit requirements.
The net paydowns on loans receivable resulted in a reduction of the
receivable from the banking/finance group.
Deferred costs increased due to a $15.6 million increase in deferred
commissions related to Canada-based funds and Class II shares. They
also increased as a result of $11.2 million in costs related to the
purchase of a building which will house the Company's operations in
Singapore.
Debt payable within one year decreased as a result of the Company using
the proceeds from a $40 million issuance of medium-term notes and
approximately $17 million in cash from operations to reduce outstanding
short-term commercial paper. The Company used the proceeds from an
additional issuance of $20 million in medium-term notes to retire notes
that matured March 15, 1996. The Company also issued $5.4 million in
short term notes and repaid them during the period.
Selected cash flow items
Six months
ended
March 31
(In millions) 1996 1995
------- ------
Cash flows from operating
activities $153.1 $132.2
Cash flows from investing
activities $26.9 ($130.6)
Cash flows from financing
activities ($104.1) ($11.8)
The increase in cash flows from operating activities was primarily the
result of an increase in net income and an increase in the net change
in trade payables and accrued expenses.
The cash flows from investing and financing activities during the
period were affected primarily by the decrease in the Company's funding
of auto and credit card loans of the banking/finance group, purchases
of premises and equipment, repayment of debt and purchase of treasury
shares. The Company continues to fund these activities primarily from
operating cash flows while utilizing its commercial paper and medium-
term notes facilities when appropriate.
During the six-month period ended March 31, 1996, the Company purchased
954,755 Franklin Resources, Inc. shares for $50.7 million. On March
14, 1996, the Board of Directors of the Company authorized up to an
additional 3,000,000 shares under its repurchase program. At March 31,
1996, the Company had 3,914,511 shares remaining under its authorized
repurchase program. The Company will continue from time to time to
purchase its own shares in the open market and in private transactions
for use in connection with various corporate employee incentive
programs and when it believes the market price of its shares merits
such action.
Distribution of Class II shares has required the Company to advance a
one percent dealer commission which is expected to be recouped
substantially during the subsequent twelve-month period primarily
through a .75% and .50% asset based charge on equity and fixed income
funds, respectively. The one per cent dealer commission has been
deferred and amortized on a straight-line basis over the eighteen-month
contingent deferred sales charge period. The Company has funded these
advances through operating cash flows and existing debt facilities. The
Company anticipates increased sales of Class II shares which will
result in increased advances of dealer commissions.
At March 31, 1996, the Company held liquid assets of $735.2 million,
including $337.6 million in cash and cash equivalents as compared to
$643.2 million, including $261.7 million in cash and cash equivalents
at September 30, 1995, respectively.
FRANKLIN RESOURCES, INC.
PART II - OTHER INFORMATION
Item 4. Submission of Matters to a Vote of Security
Holders
(a) The Annual Meeting of Stockholders of Franklin Resources, Inc. was
held at 10:00 a.m., Pacific Standard Time, on January 25, 1996 at the
offices of the Corporation at 777 Mariners Island Boulevard, San Mateo,
California 94404.
The three (3) proposals presented at the meeting were:
1. The election of nine (9) directors to hold office until the
next Annual Meeting of Stockholders or until their successors
are elected and shall qualify.
2. The ratification of the appointment by the Board of Directors
of Coopers & Lybrand, L.L.P. as the Company's independent
certified accountants for the current fiscal year ending
September 30, 1996.
3. The transaction of such other business as properly may
come before the Meeting or any adjournments or
postponements thereof.
(b) Each of the nine nominees for director was elected and received
the number of votes set forth below:
Name For Withheld
Harmon E. Burns 72,645,467 362,138
Judson R. Grosvenor 72,624,017 383,588
F. Warren Hellman 72,648,746 358,859
Charles B. Johnson 72,645,110 362,495
Charles E. Johnson 72,644,467 363,138
Rupert H. Johnson, Jr. 72,644,808 362,797
Harry O. Kline 72,553,475 454,130
Peter M. Sacerdote 72,557,828 449,777
Louis E. Woodworth 72,663,631 343,974
The ratification of the appointment of Coopers & Lybrand,
L.L.P. as the Company's independent certified accountants for
the fiscal year ending September 30, 1996, was approved by a
vote of 72,975,914 in favor, , 20,016 shares against, and
11,675 shares abstaining.
Item 6. Exhibits and Reports on Form 8-K
(a) The following exhibits are filed as part of the report:
Exhibit (3)(i)(a)Registrant's Certificate of Incorporation, as filed
November 28, 1969, incorporated by reference to Exhibit (3)(i)
to the Company's Annual Report on Form 10-K for the fiscal
year ended September 30, 1994 (the "1994 Annual Report")
Exhibit 3(i)(b) Registrant's Certificate of Amendment of Certificate
of Incorporation, as filed March 1, 1985, incorporated by
reference to Exhibit (3)(ii) to the 1994 Annual Report
Exhibit (3)(i)(c) Registrant's Certificate of Amendment of Certificate
of Incorporation, as filed April 1, 1987, incorporated by
reference to Exhibit (3)(iii) to the 1994 Annual Report
Exhibit (3)(i)(d) Registrant's Certificate of Amendment of Certificate
of Incorporation, as filed February 2, 1994, incorporated by
reference to Exhibit (3)(iv) to the 1994 Annual Report
Exhibit (3)(ii) Registrant's By-Laws are incorporated by reference to
Exhibit 3(v) to Registrant's Form 10-Q for the Quarterly Period
ended December 31, 1994.
Exhibit 4: Instruments defining the rights of holders, including
indentures
i) Form of Indenture-Exhibit No. 4 to the Company's
Registration Statement on Form S-3 (33-53147) filed by the
Company electronically on April 14, 1994 (the "MTN S-3"),
incorporated by reference in its entirety.
ii) Form of Fixed Rate Note-Exhibit No.4.1 to Amendment No. 1
to the MTN S-3, filed by the Company electronically on May 19,
1994, incorporated by reference in its entirety.
iii) Form of Floating Rate Note-Exhibit 4.2 to Amendment No.
1 to the MTN S-3, filed by the Company electronically on May
19, 1994, incorporated by reference in its entirety.
Exhibit 10.1 Representative Investment Management Agreement between
Templeton Global Strategy SICAV and Templeton Global Advisors
Limited.
Exhibit 10.2 Representative Investment Management Agreement between
Templeton Global Strategy SICAV and Franklin Advisors, Inc.
Exhibit 10.3 Representative Investment Management Agreement between
Templeton Russian and Eastern European Debt Fund and Templeton
Investment Management Limited, Inc.
Exhibit 10.4 Representative Service Agreement between Templeton Russian and
Eastern European Debt Fund and Templeton Global Strategic
Services S.A.
Exhibit 11 Computations of per share earnings. (See page )
Exhibit 12 Computations of ratios of earnings to fixed charges (See page)
Exhibit 27 Financial Data Schedule
(b) Reports on Form 8-K:
Form 8-K dated April 26, 1996 reporting under Item 5 Other
Events the filing of an earnings press release by the Company
on April 25, 1996 and including said press release as an
Exhibit under Item 7 Financial Statements and Exhibits.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf
by the undersigned thereunto duly authorized.
FRANKLIN RESOURCES, INC.
Registrant
Date: May 14, 1996 /S/ Martin L. Flanagan
----------------------
MARTIN L. FLANAGAN
Senior Vice President,
Treasurer and Chief
Financial Officer
INDEX TO EXHIBITS
Exhibit
(3) The following exhibits are filed as part of this report:
Exhibit (3)(i)(a) Registrant's Certificate of Incorporation,
as filed November 28, 1969, incorporated by
reference to Exhibit (3)(i) to the Company's
Annual Report on Form 10-K for the fiscal year
ended September 30, 1994 (the "1994 Annual
Report")
Exhibit 3(i)(b) Registrant's Certificate of Amendment of
Certificate of Incorporation, as filed March 1,
1985, incorporated by reference to Exhibit (3)(ii)
to the 1994 Annual Report
Exhibit (3)(i)(c) Registrant's Certificate of Amendment of
Certificate of Incorporation, as filed April 1,
1987, incorporated by reference to Exhibit
(3)(iii) to the 1994 Annual Report
Exhibit (3)(i)(d) Registrant's Certificate of Amendment of
Certificate of Incorporation, as filed February 2,
1994, incorporated by reference to Exhibit (3)(iv)
to the 1994 Annual Report
Exhibit (3)(ii) Registrant's By-Laws are incorporated by
reference to Exhibit 3(v) to Registrant's Form 10-Q for the
Quarterly Period ended December 31, 1994.
Exhibit 4: Instruments defining the rights of
holders, including indentures
i) Form of Indenture-Exhibit No. 4 to
the Company's Registration Statement on Form S-3
(33-53147) filed by the Company electronically on
April 14, 1994 (the "MTN S-3"), incorporated by
reference in its entirety.
ii) Form of Fixed Rate Note-Exhibit
No.4.1 to Amendment No. 1 to the MTN S-3, filed
by the Company electronically on May 19, 1994,
incorporated by reference in its entirety.
iii) Form of Floating Rate Note-
Exhibit 4.2 to Amendment No. 1 to the MTN S-3,
filed by the Company electronically on May 19,
1994, incorporated by reference in its entirety.
Exhibit 10.1 Representative Investment Management
Agreement between Templeton Global Strategy SICAV
and Templeton Global Advisors Limited.
Exhibit 10.2 Representative Investment Management
Agreement between Templeton Global Strategy SICAV
and Franklin Advisors, Inc.
Exhibit 10.3 Representative Investment Management
Agreement between Templeton Russian and Eastern
European Debt Fund and Templeton Investment
Management Limited, Inc.
Exhibit 10.4 Representative Service Agreement
between Templeton Russian and Eastern European
Debt Fund and Templeton Global Strategic Services
S.A.
Exhibit 11 Computations of per share earnings. (See page )
Exhibit 12 Computations of ratios of earnings to fixed charges (See page)
Exhibit 27 Financial Data Schedule
(b) Reports on Form 8-K:
Form 8-K dated April 26, 1996 reporting under Item 5 Other
Events the filing of an earnings press release by the Company
on April 25, 1996 and including said press release as
an Exhibit under Item 7 Financial Statements and Exhibits.